Doctors, Patients, Hospitals Must Demand Fair Health Care
T.R. Reid at Husson:
Thursday, November 17, 2011 6:50 AM
Health care costs in the United States are higher than in all other countries in the world, and health care costs in Maine are among the top five highest in the nation - but there is little sense in waiting for the government to make it better.
T.R. Reid wrote The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. He was in Bangor last week speaking at Husson.
That was the lesson that T.R. Reid, veteran Washington Post reporter and author of the 2009 best seller The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, learned in the process of making his next film.
"U.S. Health Care: The Good News" will be broadcast nationally on PBS next February.
"We were going to go around the country and look for health care systems that worked and ones that didn't," Reid told an early morning audience of doctors, hospital administrators, and other health care professionals who gathered to hear him speak at Husson University in Bangor last week.
U.S. health care: The good stories
"There were so many good stories out there that we didn't have time for the bad stories," said Reid. "We found doctors and hospitals that decided they had to cut costs and provide affordable health care."
Reid's research over the past few years has led him to scrutinize health care systems in five developed countries and in India, which is the second most populated country in the world and will soon be number one.
His goal was to find out what worked and why and what lessons could be applied to reforming the American health care system to make it more affordable and accessible.
What he found was that American health care worked fine for the most part. It was health insurance that was failing Americans. And, he said, politicians were unlikely to do much about it because they had political interests to protect back home in their own districts.
"In the U.S. there are 100,000 adjusters who are employed by the health insurance industry solely to deny claims. That is their job. In other countries, health insurers are not allowed to deny claims."
Health insurers are non-profit organizations in most countries, not for-profit companies. They still effectively compete against each other, however, through lowering administrative costs, said Reid.
Record profits for U.S. health insurance companies
"There is no other country in the world that allows the health insurers to make money. It's a conflict of interest between keeping people healthy and paying dividends to shareholders," said Reid. "Most countries don't have a problem with providers making a profit. They just don't want the payment scheme to be for profit."
Aetna is a good case in point. Aetna reported $1.77 billion in profits in 2010 - up 38 percent from 2009, as reported by CNN Money. Aetna's profits in 2011 also look promising: the Associated Press reported in October that Aetna's profit margin is being helped because fewer people are going to the doctor and more are putting off elective surgery. Further, Aetna dropped coverage for some hospitals because they weren't making enough money. The result was that patients with Aetna health insurance were not covered by their insurance when they went to certain hospitals for treatment.
Few dispute the quality of American health care - if you can afford it. Fifty million Americans can't. But The U.S. is not the only country with high-quality care.
Reid researched five developed democracies that have health care coverage for all citizens: Japan, Taiwan, Germany, Britain and Switzerland. The total cost for health care (adding government, employer and direct employee contributions together) in each was remarkably less than in the U.S.
In Britain, which has been much maligned in the health care debate in the United States, the cost of health care was almost 50 percent less - a result of an aggressive preventative care program that reduces costs by preventing more serious conditions, according to the British administrator for the National Health Service.
Japan: Ten bucks a night for a hospital bed
In Japan, an agressively capitalist nation, according to Reid, a night in the hospital cost $10 and there were no waiting lists to see a doctor or have surgery. And the quality is rated very high.
Switzerland, one of the most expensive countries in Europe, provides perhaps the most direct comparison. In 1994, Switzerland had a privatized health care system very similar to the American system. If you lost your job, you also lost your coverage. By a slim margin, the Swiss passed the Sickness Law in a referendum that mandated everyone buy insurance, with the state paying for the poor. The law no longer allowed insurance companies to cherry pick the young and healthy and they could no longer make a profit on basic care. Swiss who refused to sign up for health insurance were assigned an insurer and had to pay the monthly bill.
Benefits are fixed for everyone, but insurers can charge for supplemental coverage, such as a private room in the hospital. They also compete with each other on administrative costs, which tend to be around five percent. In the U.S. system, by comparison, health insurance administrative costs hover around 22 percent, said Reid.
700,000 U.S. bankruptcies due to medical bills
Reid's five-country research uncovered no person who had gone bankrupt or lost their home as a result of health care costs. In the U.S., by contrast, Reid reported that around 700,000 Americans a year go bankrupt due to medical bills.
Reform is desperately needed, he said.
"The key point is that we can do this whether the government acts or not," said Reid. "We don't need to wait for Washington to hit us with a sledge hammer. We can do this at the local level. It's being done at the local level."
Reid said his research into the effective, affordable health care in the United States revealed an important lesson: the areas that had the lowest cost of care and the highest quality were in areas where the highest percentage of people were insured.
"Where there were fewer people insured, costs were higher because they went to the emergency room for care. They ignored pain until it was an emergency and then something that might have cost $3,000 cost $30,000." Since they didn't have the money to pay that bill, the cost was passed on to everyone else.
There is no free ride when that happens. Everyone loses: the patient, because they are sicker than they otherwise would have been had they been visiting a doctor before the condition worsened; and everyone else, because they have to pick up emergency and critical care costs.
"When everybody is covered, there are better results and it costs less," said Reid.
Affordable care in Grand Junction, Colorado
In his travels across the U.S., Reid found doctors and hospitals that had decided they had to cut costs to make quality health care affordable, but how they went about it varied. There was no single model they all followed.
In Grand Junction, Colorado, 88 separate medical practitioners and two hospitals got together and decided to cover everybody and to charge everybody the same rate.
The doctors, too, would all get reimbursed at the same rate, regardless if the patient was a Medicare patient or privately insured. The doctors would never know if the patient making the appointment was rich or poor.
And, they would negotiate with the insurance companies as a unit, not as individuals, giving them more clout.
"All the fees (for service) went into a single pot and a set fee was paid out of that pot to all doctors," said Reid. For example, any doctor that treated a patient with an ear infection would get, say, $50 reimbursed. There was no variation in reimbursement from one doctor to the next. There was no variation in reimbursement depending on whether the patient was covered by Medicare, Medicaid, or a private insurer, or paying out of pocket.
"This was an amazing idea. It was radical," said Reid.
Eighty percent of the fees in the pot were divided by the number of doctors. They were reimbursed. At the end of the year, the remaining 20 percent of the pot was divvied up among the doctors who got the best evaluations for care.
"That was the incentive," said Reid.
Health care co-op in Washington State
Washington State used a different model. They formed the non-profit Group Health Cooperative in 1947 as a community coalition dedicated to making quality health care available and affordable. Today it covers 22 counties in Washington and Idaho and is one of the few health care organizations in the country governed by consumers. Its 11-member board of trustees are Cooperative members who are elected by other members. They work with management and medical staff to put the needs of patients first.
Patient care is provided at Group Health-operated facilities and in an affiliated network of 9,000 community health care providers and 41 hospitals across the region.
The more people insured, the lower the cost and the higher the quality
In the places Reid went around the country to do the research for the PBS documentary that will come out early next year, one thing stood out: the more people that are insured, the lower the cost of health care and the higher the quality.
Overall, said Reid, the U.S. is a fourth-rate power when it comes to providing health care for its people. The U.S. health care system is rated 37th in the world in terms of
fairness and quality, according to the World Health Organization.
The 2010 Affordable Care Act, which is designed to make health insurance affordable to more people and limit the ability of health insurance companies to deny claims based on pre-existing conditions, has generated ceaseless controversy. The Supreme Court agreed this week to hear the case against the constitutionality of the Affordable Care Act in 2012, just as the next presidential election season kicks into high gear.
There is more than just an economic argument for affordable health care, said Reid. There is an ethical argument that is at the basis of democratic principles.
"Affordable health care is the right thing to do. A rich, decent, equitable democracy should provide health care for everybody," he said. "We should and we could."
But, he said, get going now. Waiting for the government to act is not the answer, especially in Maine.
"Your costs are high." said Reid. "You are among the top five states for the highest medical costs in the country."